The Lagos State Government on Friday filed an application for joinder in the appeal filed by the Federal Inland Revenue Service (FIRS), challenging the judgment of the Federal high court sitting in port harcourt, which declared that the Rivers State government and not the FIRS should collect Valued Added Tax (VAT) and Personal Income Tax in the state.

The ruling of the Court of Appeal that parties in the Value Added Tax (VAT) collection controversy should maintain status quo does not affect the VAT laws of Rivers and Lagos state governments, senior lawyers have submitted.

They explained that since the laws made by the two states were already operational and not yet a subject of any litigation, the judgment has no effect on them.

The court order to maintain the status quo had been interpreted in several quarters to mean that the Federal Inland Revenue Service (FIRS) should collect VAT pending the determination of the suit.

The Court of Appeal sitting in Abuja, had, last Friday, ordered FIRS, Rivers and Lagos states to maintain the status quo on the collection of VAT, pending the determination of an appeal that was lodged before it by FIRS.

The appellate court said the order was to preserve the ‘Res’, subject matter, of the appeal before it. Specifically, it ordered all the parties that have subjected themselves before it to “refrain from taking any action to give effect to the judgment of the Federal High Court”, which gave Rivers State government the right to collect VAT revenue, instead of the FIRS.

A three-man panel of Justices of the appellate court, led by Justice Haruna Tsammani, made the order after it deferred the hearing of an application Lagos State filed to be joined as an interested party in the matter, till September 16. Lagos State had through its Attorney-General, Moyosore Onibanjo, SAN, protested against the issuance of an order for the maintenance of the status quo, insisting that such order could not be binding on it, since it was yet to be joined as a party in the appeal by FIRS.

Major victory

Rivers State government had, last month, secured a major court victory over the Federal Government in the collection of VAT in the state and went ahead to enact necessary law and inaugurated agencies for the collection of the tax in the state.

Justice Stephen Pam of a Federal High Court in Port Harcourt, in a judgment delivered on August 9, held that Rivers State government, and not the FIRS, has the right to collect VAT in the state.

Pam, in the judgment, subsequently restrained the Attorney General of the Federation and FIRS (1st and 2nd defendants) from collecting VAT in Rivers and directed the state government to take charge of the duty. Consequently, the state House of Assembly passed the VAT Bill which was assented to by Governor Nyesom Wike to become law.

But the Abuja Division of the Court of Appeal ordered all parties that have submitted themselves before the court to maintain status quo ante bellum pending the hearing of an application seeking to stay the judgment of the Federal High Court, Port Harcourt.

However, in conversations with a national daily, senior lawyers gave reasons the judgment was not about maintaining the status quo.

Rivers has the power to collect VAT – Ozekhome

According to Chief Mike Ozekhome, SAN, the status quo ante bellum was before the breakout of hostilities. His words: “Clearly, the status quo ante bellum was before the breakout of the hostilities.

The hostilities broke out when the FIRS dragged the Rivers State government to court, arguing that it cannot collect VAT based on its law.

The said law was already duly passed and made operational by Rivers State House of Assembly that has the constitutional competency under Section 4 of the Constitution to do so. “The FHC, Port Harcourt, Rivers State, also later validated the said law.

The law was already therefore in operation before the FIRS challenged the validity of an FHC judgement, PH, which merely gave it judicial imprimatur. So, the status quo is that it is the Rivers State government that has the power to collect VAT, until perhaps, the Court of Appeal rules otherwise and set aside the FHC judgment.

However, to avoid unnecessary bickering and needless head-on collision between the Federal Government ( which owns the FIRS) and the Rivers State government in a matter that is already subjudice, I will advise that both the Rivers State government and the FIRS should both cease hostilities and maintain the status quo until the Court of Appeal finally pronounces on the matter.

“The Rivers State VAT Law was promulgated based on the judgement of the FHC, Port Harcourt. Not the other way round.

“The Court of Appeal ordered all parties, including the Attorney General of the Federation, the Lagos State Government that had also sought to be joined, to maintain status quo and not to do anything that would affect the judgement of the FHC, Port Harcourt, until the motion for stay of proceedings of the trial court’ s judgement was heard.”

Anyone dissatisfied should go to court — Adegboruwa

On his part, Ebun-Olu Adegboruwa, SAN, argued: “The order of the Court of Appeal is only limited to the subject matter of the judgment of the Federal High Court, Port Harcourt.

“The case before the court of appeal has nothing to do with the operation of the Value Added Tax Laws already passed by Rivers and Lagos states.

These laws are not before the Court of Appeal and so, the court is not expected to and cannot make a pronouncement on these laws.

“These laws are already in force and anyone dissatisfied with them should approach the proper court to ventilate his grievance.

“It, therefore, means that these laws will continue to operate notwithstanding the outcome of the appeal pending before the Court of Appeal.

“As of this day, therefore, VAT is expected to be collected by Rivers and Lagos States based on the VAT Laws.

“FIRS cannot collect VAT as it is a judgment debtor and it has been restrained by the Court of Appeal from collecting VAT while the appeal is pending.”

Court didn’t ask states to maintain status-quo — Aliyu

Also speaking, Yomi Aliyu, SAN, said: “The Court of Appeal did not ask them to maintain any status quo but rather adjourned to allow Lagos State to join the appeal properly. “Since the res cannot be destroyed and it is accountable monetarily there is no status quo to maintain!

“In any case, the laws in the two states are based on their residual powers and not yet the subject matter of any litigation to declare them null, void and/or ultra vires.”

Appellant shouldn’t rejoice yet — Omodele

In his contribution, Yemi Omodele cautioned: “The appellant in the appeal should not be celebrating yet. The entire appeal will be determined very soon.

However, if the appellate court ordered status quo be maintained by the parties; not to do what will affect the substance of the appeal pending its determination, any of the parties in the appeal who is not comfortable with the orders can challenge it at the Supreme Court for clarity purposes and as a precedent.

The fact that the respondents had taken steps in respect of the subject of the appeal before status quo was ordered does not deny any of them the right to challenge the order made at the apex court.”

It’s a declaratory judgment — Asemudara

Toeing the same line, Ige Asemudara said: “The court asked the states or the parties to maintain status quo on judicial action and possibly executive action since the disputes are between executive arms and order is a judicial one.

It cannot be an order to maintain the status quo on legislative actions. Once a law is duly passed by the legislature it becomes effective on the day of the assent or the day appointed by the law.

To be certain, the VAT laws of Lagos and Rivers State are not subject to litigation at the moment. Nobody has challenged those laws, so there cannot be a status quo order on them.

It is a different thing if the states just began to collect VAT after FIRS lost the case to Rivers State, on the strength of Rivers’ victory.

“However, the VAT collection is not on the strength of the case but on the strength of enabling legislation simultaneously passed by Rivers and Lagos State. I also expect His Excellency, Rotimi Akeredolu to sponsor a bill to the Ondo State House of Assembly for VAT collection in my state.

“The passage of the states’ VAT laws is not one of the orders made by the Rivers State High Court which can be stayed by the Court of Appeal. It is rather a constitutional enablement long slept upon.

Now, the state assemblies seem to be alive to their legislative powers. Interestingly, Lagos State was not a party to that particular suit at the High Court. So, if you ask Rivers government to stay action on the victory at the High Court, can you ask Lagos to stay action where it was not even a party to the dispute?

“Beyond these, that judgment was a declaratory judgment. The order to maintain the status quo must be in the nature of the injunction. Now that the VAT law of Rivers is passed, can that order affect a concluded act?

“The federal government should rather properly advise itself by disengaging from illegality. It should be considering remitting all the VATs collected since 1999 when the current constitution became effective, to the various states in quantum meruit.”

Judgment favours Rivers — Ubani

A former Vice President of the Nigerian Bar Association, NBA, Monday Ubani, said: “I think the Court of Appeal in Abuja was very specific when it said the party that had a judgment in its favour should maintain the status quo pending the hearing of the appeal before the Court of Appeal.

What this means is that, for now, it is Rivers that got the favourable judgment from the lower court. I think the Court of Appeal specifically granted a stay because the court says the stay is against the person who has the favourable judgment and it is Rivers that has a favourable judgment in that case.

So, if the court specifically mentions that the party that has the favourable judgment should not do anything pending the hearing of the appeal, that means Rivers is specifically asked to stay execution of that judgement until the appeal is decided.

”Similarly, President of African Bar Association, AfBA, Mr Hannibal Uwaifo, said: “Rivers State is right to go ahead with the collection of VAT. That is the right thing to do. It is a constitutional matter.”

Also on Friday, Rivers Governor Wike inaugurated Tax Appeal Commission as a follow-up to the signing into law of the VAT Bill in the state.

Kwanza:

https://www.today.ng/news/nigeria/appeal-court-ruling-rivers-lagos-free-collect-vat-sans-387891/amp?__twitter_impression=true

Swaycater:
I heard a commissioner from Kogi State saying Kogi will not be a party to calls for states to callect VATs, hearing these things sometimes breaks my heart, Why are people Soo daft? Even those in postion of authority who should know the right thing to do, would supporting FG give Yahaya Bello Apc presidential ticket?

Swaycater:
I heard a commissioner from Kogi State saying Kogi will not be a party to calls for states to callect VATs, hearing these things sometimes breaks my heart, Why are people Soo daft? Even those in postion of authority who should know the right thing to do, would supporting FG give Yahaya Bello Apc presidential ticket?

richmond500:
As a Rivers man, this VAT sweet me but is the common man going to gain anything?

People have been begging Wike to pay pensions, he has been deaf to their request and punishing Rivers people. Now to collect money, he is at the forefront.
The common shop seller who doesn't know VAT, will be tormented by Wike's tout from now on, I like this VAT ruling but Wike's not doing this for the state, he is just being selfish.

richmond500:
As a Rivers man, this VAT sweet me but is the common man going to gain anything?

People have been begging Wike to pay pensions, he has been deaf to their request and punishing Rivers people. Now to collect money, he is at the forefront.
The common shop seller who doesn't know VAT, will be tormented by Wike's tout from now on, I like this VAT ruling but Wike's not doing this for the state, he is just being selfish.